Day 7: Slot Splits Could Boost State Coffers and Horse Industry

by Renee Shaw | 01/16/14 12:03 PM

Could games of chance yield big revenues for Kentucky? Some high-ranking legislators are placing another bet on expanding gambling, and they think this could be the year it pays off.

House Speaker Pro Tem Larry Clark (D-Louisville) presented his expanded gaming bills to the House Licensing and Occupations committee Wednesday. He said he believes measures to get the question on the ballot and determine how to spend gaming revenues are in good position for passage this session, especially given Gov. Steve Beshear's vocal support.

Rep. Clark outlined his goals in authorizing casino gaming: maximize state revenue, protect Kentucky's signature industry, and enhance the year-round horse racing circuit.

House Bill 67, the proposed constitutional amendment, Clark said, is simple. The language he proposes for the November ballot reads: "Are you in favor of permitting the General Assembly to pass laws authorizing casino gaming?”

(Senate Majority Caucus Chair Dan Seum (R-Louisville) has a version of a constitutional amendment that's more detailed. His Senate Bill 33 would let voters decide whether to allow casino gambling at no more than seven locations and would dedicate ten percent of the revenue to promote equine interests.)

The Details on Implementing Expanded Gaming
House Bill 68 is the enabling legislation to accompany the constitutional amendment proposed in HB 67. Clark said HB 68 relates to casino locations, how they will be regulated, and how gaming revenues would be spent. The bill calls for eight casinos: five at racetracks and three non-track locations. He said to maximize tourism dollars and state revenues, the casinos should be located on borders of major transportation corridors close to large population centers.

Clark said the newly created Kentucky Gaming Commission would evaluate license applications.

The gaming parlors could offer poker, craps and other dice games, keno, blackjack, and slot machines. Casinos located at racetracks would pay the state 25 percent of their adjusted gaming revenue for the first three years. In the fourth year and beyond, they would pay 30 percent. Tracks would also be required to set aside 14.5 percent of slots revenue for purses, racing, and breeding interests.

Non-track casino operations would have to return more money to the state, but they would not have to set aside additional revenues to support the horse industry. Rep. Clark said state revenues would be devoted to education, local government needs, boosting the pension system, substance abuse addiction, and compulsive gambling programs.

Benefits to the State’s Equine Interests
Proponents said the measures designed to boost the horse industry can help bring about a year-round racing circuit. Rep. David Osborne (R-Prospect), a horseman and expanded gaming advocate, testified that Kentucky racetracks have lost 70 race days since the year 2000. In addition to helping the industry, he said the slots splits would also help raise the standard of living for backside workers at racetracks.

House Licensing and Occupations co-chair Dennis Keene (D-Wilder), who's offered gambling bills in the past, said his constituents are frustrated with lawmaker's stalled attention to the issue because of the threat Ohio casinos pose to horse racing interests in his northern Kentucky district.

The committee took no action following yesterday's discussion. Chairman Keene said the panel will hear from opponents of expanded gambling at next week's meeting.

Watch Legislative Update each weeknight during the session at 11 p.m. on KET, and follow me on Twitter @ReneeKET for updates throughout the day.